Cuomo: Too many governments creating high property taxes

Gov. Andrew Cuomo rattled off a list of tax-cutting initiatives for the state Wednesday but said New York could never become truly pro-business until local governments reined in property taxes.

Cuomo, at a speech to the Westchester County Association at the Tarrytown Marriott, said his administration had reduced the manufacturing tax to zero and agreed to push the state”™s estate tax in the next few years up to the $5.3 million threshold, in line with federal requirements.

Still, he said it was property taxes that are pushing residents out of the state and preventing businesses from setting up shop here.

“Why is the property tax so high? Because we have too many governments,” Cuomo said. “And the governments have just been creating more and more over the years.”

Westchester County, the residents of which pay the highest property taxes in dollar figures than any county in the U.S., has 425 governments and taxing districts, according to the governor. This includes 16 “drainage districts.” There is one municipal employee for every 20 Westchester residents, who chip in for a total county tax levy of $4.4 billion. There are so many layers of government, Cuomo said, that there are 10,200 municipal vehicles ”“ or one for every 4.6 employees. Cuomo said the current state workforce was 118,000, which is the smallest in 50 years.

The governor said the layers of government were unnecessary to the point of being “irritating.”

Statewide, there are 10,500 governments and taxing entities like fire and water districts, Cuomo said. When Cuomo served as state attorney general prior to being elected governor, he had pushed to make it easier for governments to consolidate. Since that initiative seven years ago, only two governments in the state have consolidated, he said.

A new initiative in this year”™s budget has outlined a complex formula to incentivize local governments to share services over three years. In year one of the governor”™s plan, if a local government stays under the state-imposed tax levy cap, that community”™s residents will receive a 2 percent property tax credit check. In the latter years, the credit will only hold if the municipalities approve a cost-cutting or multijurisdictional services-sharing plan that will need approval from the state.

Many local leaders have bashed the plan, saying the need to increase property taxes comes in large part due to mandates from the state. Pension contributions from local governments alone mean skyrocketing costs even when maintaining a “flat” budget. The governor shrugged off the backlash, saying the incentive forced local leaders to keep spending down and maintain the tax credits or face the wrath of their constituents.

“I”™ve been trying to get them to perform; I can”™t get them to perform. Now it”™s your turn to get them to perform,” he said. Cuomo said he wasn”™t telling municipalities to dissolve themselves but rather to take a regional approach to spending. He noted that during a shortage of road salt for snowstorms, county executives could have rallied towns and villages to combine to bid on salt, thereby keeping costs down for each community.

Greenburgh Town Supervisor Paul Feiner, a Democrat who attended the speech, said he felt more mandate relief was needed but said he agreed with Cuomo. “Everyone has to do better,” Feiner said. The supervisor said after some controversy around a proposed consolidation of the town’s Fairview and Hartsdale fire districts that he began collecting signatures this week to have the matter placed on the November ballots, for voters to decide whether or not to consolidate.

Cuomo, who discussed aspects of the recently approved 2014-15 budget, said on the state level he had turned around the impression that New York government was dysfunctional and that the state had “lost its mojo.”

Cuomo, a Westchester resident, is up for re-election this year and likely to face fellow resident and current County Executive Rob Astorino. Astorino won two elections, partially on the strength of his support from the business community. Cuomo, in his speech, said he has worked well with the business community after several years when state government had become antagonistic toward industry.

“We took business for granted and it caught up to us,” he said. New York government also became addicted to spending, he said, increasing spending 6.8 percent from 1962 to 2010, higher than the 6.2. percent growth in income and the 4.1 percent inflation rate during that time.

Bill Mooney, the Westchester County Association president, said the administration had been decidedly pro-business, cut spending and reduced unnecessary regulations. He also said the governor has been able to work with Republicans and Democrats.

“Collaboration is fundamental to moving this state forward, and this governor gets it,” he said.